Orthopediatrics Corp. · NASDAQ:KIDS
Orthopediatrics — Investor Presentation (2021)
28 slides from Orthopediatrics's investor presentation, 2021
Slide 1: Investor Presentation
2021 Investor Presentation www.OrthoPediatrics.com
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation includes "forward-looking statements" within the meaning of U.S. federal securities laws. You can identify forward-looking statements by the use of words such as "may," "might," "will," "should," "expect," "plan," "anticipate," "could," "believ
Slide 3: Founded on the cause of impacting the lives of children with orthopedic conditions
OrthoPediatrics was founded on the cause of impacting the lives of children with orthopedic conditions 226,000+ pediatric patients treated since inception 2021 // 3
Slide 4: Historical Challenges of Pediatric Orthopedics
Historical Challenges of Pediatric Orthopedics Re-Purposed Adult Plate Screws through growth plate 01 Children’s unique clinical conditions 02 Existing solutions are re-purposed from adult implants 03 Limited development of new technologies 04 No specialized sales force in Pediatric Orthopedics 05 L
Slide 5: OrthoPediatrics Solution
OrthoPediatrics Solution PediLoc Femur Screws parallel to growth plate 01 Product development focused exclusively on pediatric patients 02 Broadest pediatric specific portfolio in the industry 03 Delivering first in market novel surgical solutions 04 Only global commercial channel to market 05 Leadi
Slide 6: U.S. Addressable Market
Total Addressable Market – $3.3B U.S. Addressable Market1 — $1.5B Competitive Dynamics $140M Smart Implants 01 Large incumbents repurpose adult implants $187M 02 Require specialized sales force Sports Medicine $609M 03 Lack of focus on pediatric conditions Trauma & Deformity $200M Scoliosis Non-Fusi
Slide 7: Only Focused Pediatric Orthopedic Company
Only Focused Pediatric Orthopedic Company 37 unique surgical systems Innovative Consistent cadence of innovative product launches Technology Expanding suite of enabling technologies Internal R&D, acquisitions, and partnerships Only global sales & distribution channel Consistent Commercial Serve 100%
Slide 8: Strategic Pillars
Strategic Pillars Laser focus on high-volume Children’s Hospitals that treat majority of 01 pediatric patients 02 Provide a broad product portfolio uniquely designed to treat children, surround pediatric orthopedic surgeons covering their needs 03 Deploy instrument sets and provide unparalleled sale
Slide 9: Focus on High-Volume Children's Hospitals
01 Focus on High-Vol Children’s Hospitals Current Target Market – $1.7B U.S. Current Target Market1 — $0.8B $17M Sports Medicine $180M Scoliosis Non-Fusion 300 U.S. Pediatric Centers conduct $378M Trauma & ~62% Deformity of T&D and Comments Scoliosis procedures 01 ~1,400 Fellowship Trained Pediatric
Slide 10: Broad Product Portfolio
02 Broad Product Portfolio Pre-IPO Transitioned from Early Entry to Clinically Significant PediPlate Response BandLoc Clavicle Cannulated Physeal PediNail Hip Systems ACL 5.5/6.0mm 5.5/6.0mm Plating Screws Tethering System LCB / LPF System Fusion System Banding System 2008 2009 2012 2013 2014 2015 2
Slide 11: Accelerating Sales Growth Post-IPO
03 Expand Instr. Sets & Sales Personnel Accelerating Sales Growth Post-IPO Through Strategic Investment and Innovation Total Revenue ($M) +21.6% $99.0 CAGR 2016 2021 CAGR U.S. Independent Sales Consultants 90 185 16% $72.6 $71.1 Instrument Set Deployments $7M $15M 19% $57.6 Unique Surgical Systems 1
Slide 12: Expand Market with R&D
04 Expand Market with R&D Post-IPO moved from Clinically Significant to Disruptive FireFly 7D Patient PNP Orthex Intraoperative Specific Wrist Pediatric External Navigation Navigation Fusion Nailing Fixation PediFoot ApiFix Enabling Guides Plates Platform Systems System Non-Fusion Technology 2017 20
Slide 13: Expand Market with M&A
04 Expand Market with M&A Strategic Acquisitions & Partnerships 2017 2019 2020 2021 Partnership Acquisition 2021 // 13
Slide 14: Acquired Innovative Technologies: Orthex and ApiFix
04 Expand Market with M&A Acquired Innovative Technologies Orthex • Disruptive software complements ex-fix Acquired software-based and non-fusion frame technologies • Expands addressable market Significant sales synergies with legacy portfolio • Serve 85% of procedures, up from 65% • Significantly s
Slide 15: Enabling Technology Partnerships
04 Expand Market with M&A Enabling Technology Partnerships FIREFLY® Pedicle Screw FireFly 7D Surgical Navigation Guides S2/Alar Intraoperative Navigation Unique patient specific 3D printed bone models and drill guides, can be used with any Spinal Deformity Correction system. Eliminates Radiation exp
Slide 16: 7D Real World Experience
04 Expand Market with M&A 7D Real World Experience Chris Comstock, MD & Eric Wait, MD Driscoll Children’s Hospital First Pediatric Deformity Installation in US I have noticed we are seeing shorter stays for our patients with complex spinal surgeries since we have started using the 7D technology. It
Slide 17: Physician Education and Awareness
05 Train Next-Gen Surgeons Physician Education and Awareness As a surgeon educator, I have OP Hands-on sales training and support always appreciated and valued 01 OrthoPediatrics’ commitment to • Annually invests 3% of sales on clinical education education. • Conducts >700 product/training sessions
Slide 18: Catalysts & Pipeline
Catalysts & Pipeline • Expanding intramedullary nailing portfolio T&D • Solutions for rare bone disease • Expansion of external fixation portfolio • Advancing non-fusion treatment • Early-onset scoliosis innovations Scoliosis • Innovation in highly-complex fusion • Manual growing, rib based, etc. •
Slide 19: Differentiated surgical systems driving growth
37 Differentiated surgical systems driving growth Trauma & Deformity Scoliosis 2020 Revenue by Product Family Surgical Systems Revenue Surgical Systems Revenue 26 $65.0 8 14 $26.8 $30.0 3 $9.3 2016 9/30/21 2016 2021E 2016 9/30/21 2016 2021E +13% CAGR +19% CAGR >2X Growth >3.2X Growth Trauma & Deform
Slide 20: Strong History of Y/Y Growth
Strong History of Y/Y Growth ($M) 39% $99.0 26% -2% $72.6 $71.1 26% $57.6 22% 20% $45.6 31% $37.3 21% 22% $31.0 58% $23.7 44% $19.6 137% $16.1 400% $10.2 $7.1 $0.6 $3.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021E U.S. International 2021 Guidance (mid-point) 2021 // 20
Slide 21: Category Revenue Summary
Category Revenue Summary $80 $1.7 $2.7 $1.1 $70 $1.0 $60 $1.2 $21.5 $1.0 $20.7 $7.7 Revenue ($ in Millions) $7.3 $50 $1.2 $16.7 $6.0 $40 $1.1 $11.6 $1.1 $9.4 $30 $0.8 $7.4 $49.4 $47.7 $17.9 $3.6 $16.8 $20 $39.7 $14.6 $32.8 $26.8 $10 $22.5 $19.3 $0 2014 2015 2016 2017 2018 2019 2020 1Q21 2Q21 3Q21 Tr
Slide 22: Revenue Seasonality
Revenue Seasonality Seasonality Drives Stronger Performance in Summer Months and Holiday Periods 35% 31% 30% 29% Revenue as % of Total Year 27% 27% 27% 27% 26% 26% 26% 26% 26% 25% 25% 25% 25% 23% 22% 21% 21% 20% 20% 19% 15% 10% 5% 0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2017 2
Slide 23: Income Statement Summary
Income Statement Summary ($ in Millions) FY 2018 FY 2019 FY 2020 3Q 2020 3Q 2021 Revenue $57.6 $72.6 $71.1 $22.2 $25.1 Growth % 26% 26% (2%) 7% 13% Gross profit $42.7 $54.6 $55.0 $17.6 $18.6 Margin % 74% 75% 77% 79% 74% Operating expenses $52.2 $63.7 $81.8 $20.1 $22.2 Operating loss ($9.5) ($9.1) ($
Slide 24: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in Millions) Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 Net loss ($2.2) ($4.5) ($16.3) ($18.9) Interest expense, net 0.5 1.0 1.9 2.8 Other (income) expense (0.3) 0.1 (0.8) 0.3 Provision for income tax (benefit) (0.3) - (0.9)
Slide 25: Adjusted EPS Reconciliation
Adjusted EPS Reconciliation Three Months Nine Months Ended Ended September 30, September 30, 2021 2020 2021 2020 Earnings (loss) per share, diluted (GAPP) ($0.11) ($0.24) ($0.85) ($1.07) Accretion of interest attributable to acquisition installment 0.03 0.04 0.09 0.09 payments Fair value adjustment
Slide 26: Balance Sheet
Balance Sheet ($ in Millions) As of September 30, 2021 Assets Liabilities Cash $59.1 Accounts payable $9.0 Account receivable $18.1 Debt $1.0 Inventory (net) $55.5 Accrued expenses $4.7 Other current assets $2.7 Acquisition Pay. & Other Liab. $67.8 PP&E (net) $28.8 Paid-in capital $392.9 Intangibles
Slide 27: Investment Summary
Investment Summary 01 Only diversified company focused exclusively on pediatric orthopedics 02 Large, underpenetrated market opportunity in pediatrics 03 Highly concentrated customer base with targeted commercial strategy 04 Broad product portfolio with innovative solutions 05 Only provider committe
Slide 28: 2850 Frontier Drive Warsaw, IN 465852 ph: 574.268.6379 or 877.268.6339 fax: 574.268.6302
2850 Frontier Drive Warsaw, IN 465852 ph: 574.268.6379 or 877.268.6339 fax: 574.268.6302 2021 // www.OrthoPediatrics.com